Oil companies promise jobs amidst weak regulations

Throughout much of their 36-page handbook, the three oil companies operating in Uganda – Tullow, Total and Cnooc - have laid out the kind of opportunities Ugandans should look out for as the country heads towards First Oil, and encouraged the development of skilled manpower and high standards.

Released a day before the country joined the rest of the world to celebrate International Labour day, where some youths continued to protest against high unemployment levels, the handbook pointed out that the oil industry would create between 11,000 to 13,000 direct jobs. The development will further generate 100,000 - 150,000 indirect and induced jobs, it added. However, 80 per cent of these jobs will be short-term, the report warned.

“Of the total manpower, 60 per cent will be technicians and craftsmen, 15 per cent engineers and managers, while 25 per cent will be unskilled. Therefore, education should focus on civil construction, electrical and mechanical fields,” the report reads.

Speaking at the launch of the report, Jimmy Mugerwa, the general manager at Tullow Oil Uganda, said the partners carried out an industry baseline survey to assess the employment gaps in the country.

“While some of the technical requirements will require international suppliers’ expertise, the study reveals opportunities for local suppliers to partake in the project in several sectors such as mechanical construction services, construction steel manufacturing, transportation and logistics, food supply, domestic airline services, hazardous and generic waste management and fuel wholesale, among others,” he said.

Jin Wei Gan, the vice president of Cnooc, said the findings are instrumental in preparing Ugandans to participate in the oil sector.

“National content is not only a legal requirement but also a priority and an opportunity to foster the success of the project. The demand for local goods and services, materials, skilled and less skilled manpower is expected to increase in the development phase.

Ahlem Friga-Noy, the corporate affairs manager at Total E&P Uganda, said it was the first time oil companies were launching such a survey at this early stage of the project to access the capabilities of the country.

“We shall procure a wide range of contracts as well as employ more Ugandans,” she said.

The oil companies agreed that there remains a big shortage of skilled manpower in the country.

“A major challenge relating to human resources will be the number and level of certification of technicians to comply with oil and gas standards,” the report reads.

Nelson Ofwono, Tullow’s local content manager, urged local businesses to read the report and utilize its findings to adequately and fully participate in the sector.

“Right now we have serious challenges. You would think we have many drivers in the country. Yes we have them but what standards do they have?” he wondered.

Bernard Ongodia, a senior geophysicist at the Petroleum Exploration and Production department, said government is looking at strengthening vocational training to boost the much-needed manpower in the sector.

“Uganda Petroleum Institute Kigumba [UPIK] should be in a position to churn out a number of Ugandans to participate in these activities. We are also discussing with the World Bank to make sure that institutions like Uganda Technical Institute Kichwamba is upgraded to offer short-term vocational training for the sector’s workforce,” he said.

And yet, it will take more than reading the oil companies’ handbook, or enrolling for vocational training, for Uganda’s local content drive to generate the benefits that the public expects. Other than the skilled manpower shortage, there are still a number of gaps in terms of regulation and transparency regarding how contracts and jobs from the oil companies can be accessed.

While the Petroleum Act, 2012, calls for oil companies to offer the first priority to Ugandans, the regulations to operationalise the law are not yet in place. Local firms have often complained of the lack of transparency in oil contracts. For instance, for a company to participate in oil contracts, it needs to be prequalified first, yet these companies don’t know when the prequalification is done.

Dennis Kamurasi, the vice chairperson Oil and Gas Service Providers Association, earlier said what oil companies are preaching is different from what they are doing. He questioned why oil firms continued to award small contracts to foreign firms.

“Why do we have foreign companies in catering, or spraying mosquitoes? Aren’t there Ugandan companies that can do this?” he wondered.

Kamurasi proposed that in the regulations, certain goods and services should be ring-fenced for only Ugandan citizens and companies. Otherwise, multinational oil companies will continue to circumvent the law under the guise of ‘quality and industry practice,’ he said.

On training, UPIK is struggling to survive and has no clear curriculum. Established in 2009, it admitted its first batch of students in 2010 as part of a strategy to build local content in the nascent petroleum industry. The institute has struggled since then, with studies coming to a standstill.

So far, almost all the students UPIK has churned out have no jobs because their training is not in tandem with the practical requirements. Kamurasi advises that local firms need to be helped. He says that local firms’ capacity should be built through joint ventures, skills and technology transfer and contract transparency, among others.